Long-Term Care Planning

Long-term care is something we hear a lot about. And I say we have conversations with you guys that come in from watching our show and even at our dinner events. It’s a big risk that we have in retirement plans. Most recent numbers I saw for Traverse City, Michigan was for an assisted living facility approaching $7,000 a month today, and we look at inflation.

These are massive costs that we foresee coming up down the road. And what’s important about these long-term care costs is these are kind of the base costs. In recently looking at facilities for my mother, we found as we add additional services, these costs start to go way up from there. Things like if we want to have more than one shower a week or pill management or some of these other I would call kind of basic needs continues to drive these costs up.

Now, what we talk about a lot is individuals will come in and say, well, I’m going to spend more early in retirement. My expenses are going to kind of drop off later cause I’m going to do less. Well, when you start looking at long-term care, it’s almost like a hockey stick. Our expenses kind of maintain themselves. Then they go dramatically up later in retirement.

So it’s kind of the opposite of what we think. Well, why am I bringing this up? Well, we’ve seen some tremendous growth in the market the last couple of years. This offers a really great time to be stress testing your financial plan, to see how long-term care may impact it, and then think about, well, maybe if we’ve seen some appreciation of our portfolio, maybe rebalancing it, taking some of that growth off the table, putting it in maybe some sort of insurance policy or some other type of investment where we can self-insure, but more so protecting ourselves against that long-term care risk.

If you haven’t built out a financial plan, you haven’t stress tested your financial plan against these type of events, it’s probably a great time to do that and maybe start taking some action today about taking some of this market growth that we’ve seen over the last few years and solving for that long-term care need, that truth be told, is inevitable, and probably going to come up in the next few years for us.